For over half a century I have worked as an investment banker, and then written about Wall Street, highlighting the market upheavals of 1973-4, 1987, 1999-2000, and 2007-2008 and their ramifications for the American economy,the disparity of wealth in the nation and the continuing risks of another deep global financial crisis.

Previously I was National Editor and Senior Editor at Forbes Magazine, New York Bureau Chief of The Boston Globe and Wall Street correspondent of The Economist.

The 400 Richest Americans Pay An 18% Tax Rate

The 400 richest Americans used to pay 30% of their income on the average to Uncle Sam. Today, they pay 18% on the average, according to Steve Rattner, a Wall Street financier, who just presented these figures on Mornings With Joe,MSNBC.

The main reason for the drop in their tax rate of some 40% is the tax cuts by George Bush in 2003, taking the rate paid on dividends and capital gains down to 15%. This reduction in the investment class’s taxes powered the bull market in stocks from the fall of 2003 until the fall of 2007.

Shockingly, the plan to raise the debt ceiling collects nothing from the wealthiest Americans to reduce our budget deficit. The Republican right wing holds the Obama White House hostage. It’s a sad day for the principle of sharing the pain equitably.

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Actually, the 18.11% effective tax rate the 400 highest income taxpayers paid in 2008 was UP from the record low of 16.62% they paid in 2007. By contrast, taxpayers with an adjusted gross income between $500,000 and $1 million paid an effective tax rate of 23.4% in 2008. Here’s another shocking figure: the 400 highest income taxpayers collected a record 13% of all net capital gains reported by taxpayers in 2008. For more, see my story here: http://blogs.forbes.com/janetnovack/2011/05/11/richest-400-took-record-share-of-capital-gains-during-market-meltdown-year/

I couldn’t agree with both Robert Lenzner and Janet Novack more. Ever since 2003 (actually, I think I remember that it was not 2003, but 2001), I have been advocating just that, even though most of my own income is from dividends and capital gains. There was no reason then for me to get that tax break and now, with the economic situation created mostly by the same Bush administration that brought us that bank-and-insurance-company provoked economic meltdown, there is even less reason to not share the pain that so many others are feeling who do not get such tax benefits.

Winning elections should NOT be the first priority; patriotism IS. Raising taxes just slightly can do so much more than what our Republican party is offering now.

I am so glad I read your column. It is so refreshing to hear the real reason Congress is sabotaging the government. It is to keep the haves and the havenots from reaching common ground. We the working class needs a break! Congress has nothing else better to do but satisfy the Tea Party and the wealthy. They do not care about what happens to the country.

And how many million Americans paid 0% or less of their income. Yet received the same amount or more services. It is time to quit making those with money the bad guys. Level the playing field, flat tax 18% for EVERYONE. No deductions. No exceptions. Eliminate all welfare for anyone able to work that refuses.

Welfare? Do you realize what you are saying? Do you realize what a tiny droplet in the bucket welfare is compared to the lost billions this country suffers at the hand of an UNLEVEL tax playing field?

How is it that a single person making $36,000 pays 25% of their income in taxes (an effective 25% with no loopholes) and the wealthiest americans pay 18%? And then folk such as yourself want to know why the people in power get labled the bad guys?

The country is in miserable debt and the folk in a basic, fair position to bring us back — the same folk that benefit more than anyone from the current financial framework of this country — aren’t even paying the SAME percentage as the “little guy.”

Your FLAT tax percentage would be great, madd, but it ain’t happening, and until it does the folk in power/making the most money ARE the bad guys, and all of this talk hasn’t even begun to address the issue of where all the tax revenue is going and what class of people it truly benefits….

kohut, At 36K, many families qualify for “Earned Income Tax credits”. And while they pay Social Security, they pay no federal tax. A family of 4 making $42K/year gets money back from the fed (I helped them get a mortgage, so I know this). Not sure where your 25% is coming from. But if you want to do the Argentinian tax the rich motto and chase away the capital, enterpreneurship, et al … feel free. We’re heading for banana republic status soon anyway, why wait?

Hi, Mike, per the IRS tax table for 2011, $36,600 is filing single; families pay 25% beginning at $76,900 — are you trying to tell me folks in this income class are routinely getting tax breaks putting them at an effective 18%?

As for $42K/year for a family of 4, your married household would be taxed only 15%, anyway. Think about their income — $10,500 per year per person. I am astonished you were even able to find them a loan in the current economic climate.

It is interesting you make reference to the US as turning into a Bananna Republic, as that’s what happens when government’s are corrupt — precisely the point.

mikec711 you’re right we are heading the way of a Banana Republic because, just like a Mexico, Honduras, or Guatemala, wealth is concentrated in the hands of a few, who get most of the tax breaks. Since 1980, the average in tax saving for the top 400 is $46 Million. Their average income has gone up 230%. How many people who get an Earned Income Credit are getting back $46 Million? Have middle class incomes gone up 230% since 1980? Do you know why the period between 1946 and 1970 saw the greatest economic expansion this country has ever had? Because, while the top 1% made gains, the bottom 50% made greater gains.

Also, like a Banana Republic lack of revenue will lead to lack of public spending. We will end up with bad roads, collapsed bridges and tunnels, a commercial radar system that is out of date and will make airline travel dangerous. Like many Banana Republics, we will lose foreign investment because of poor infrastructure. Republicans of today are a danger to the long term health of American because the don’t think long term, which cost America much more in the long run. If Eisenhower were around today, people like you would be saying “National Highway system!?!?!?!, don’t waste my tax dollars on that, dirt roads are just fine”. You’re a typical Republican who thinks only about himself and about today (how can I make sure I keep mine and damn the rest of the country!).